Andrew Carnegie

Andrew Carnegie Childhood & Early Life

Andrew Carnegie was born on November 25, 1835 in Dunfermline, Fife, Scotland. His father’s name was William Carnegie. Following the hard times as a handloom weaver and being a victim of widespread starvation, his father decided to move his family to Allegheny, Pennsylvania in the United States in 1848. Andrew started as a bobbin boy at the age of thirteen, changing spools of thread in a cotton mill 12 hours a day, for 6 days a week. For this, he was paid a meagre wage of $1.20 per week. In 1850, he took the job of a telegraph messenger boy in the Pittsburgh Office of the Ohio Telegraph Company, at $2.50 per week. The new job had its benefits; Andrew now could enter the local theatre without paying any admission fee. Within a year, the young Andrew was promoted to the post of operator. In 1853, Andrew was employed by Thomas A. Scott of the Pennsylvania Railroad Company as a secretary/telegraph operator. At the age of eighteen, Andrew Carnegie became the superintendent of the Pittsburgh Division. His job at Pennsylvania Railroad Company proved to be immensely significant for his future growth. Railroad business was the biggest business in the America and provided Carnegie with the knowledge about the management and cost control.

 

His association with Scott grew who, in turn, helped Carnegie in his first investment. In 1855, Carnegie with the help of Scott invested 500$ in the Adams Express, which was contracted with the Pennsylvania to carry its messengers. Few years later, he received few shares in T.T. Woodruff's sleeping car company. Reinvesting his money in similar railroad investments, Carnegie accumulated considerable amount of capital for his future business. Carnegie helped in the merger of Woodruff's company and that of George M Pullman, who invented the sleeping car for first class travel. This merger proved to be great success for Woodruff and Carnegie. Carnegie continued his work at Pennsylvania Railroad Company under Thomas Scott and brought several improvements to the service. Civil War gave a golden opportunity to Carnegie, as he was appointed at the post of Superintendent of the Military Railways and the Union Government's telegraph lines in the East. He helped to open rail lines into Washington D.C. After the defeat of Union forces at Bull Run, he personally supervised the transportation of defeated troops. This war showed the importance of industries to the American success.

 

Seeing the vast opportunity in steel business, Carnegie invested $40,000 in Story Farm on Oil Creek in Venango County, Pennsylvania. Within a year, he received a return of $1,000,000 in cash dividends and considerable amount of profit in selling the petroleum from oil wells. During the Civil Wars, Pittsburgh had become the center of wartime production including iron products such as armor for gunboats, cannon, and shells. Carnegie collaborated with few others in establishing a steel rolling mill. His control over the industry and steel production became major part of his wealth. On completion of war, Carnegie left the railroad business and concentrated mainly on ironworks trade. Carnegie had already invested in iron business before the war. He looked for developing new iron works and eventually, formed the Keystone Bridge Works and the Union Ironworks, in Pittsburgh. Although he had left Pennsylvania Railroad Company, he remained close to the management especially to Thomas A. Scott and J. Edgar Thomson. With the help of his connections, Carnegie managed to get the contracts for his Keystone Bridge Company and the rails produced by his ironworks.

 

In 1881, Carnegie took his family to a trip to United Kingdom. Traveling to Scotland by coach, they visited their old home in Dunfermline, where Carnegie's mother laid the foundation stone of a Carnegie Library for which he donated money. His business kept booming during this period. Apart from owning steel works, Carnegie purchased the iron ore fields around Lake Superior at an unbelievably low cost in 1886. The same year, he also published his renowned book, “Triumphant Democracy”. This book received a favorable response in U.S. despite creating strong controversy in UK. Carnegie’s two main achievements included cheap and efficient mass production of steel rails for railroad lines and vertical integration of all suppliers of raw materials. In year 1888, he bought the rival Homestead Steel Works, which added an extensive plant with feeder coal and iron fields, a 425-mile long railway, and a line of lake steamships to his company. By 1889, Carnegie owned J. Edgar Thomson Steel Works, Pittsburgh Bessemer Steel Works, the Lucy Furnaces, the Union Iron Mills, the Union Mill, the Keystone Bridge Works, the Hartman Steel Works, the Frick Coke Company, and the Scotia ore mines. He combined all his assets and formed Carnegie Steel Company in 1892. With this, Carnegie Steel became the largest manufacturer of pig iron, steel rails, and coke in the world.

 

At the age of 66, in 1901, Carnegie was considering of retirement. As such, he converted his privately owned enterprises into joint stock corporations. John Pierpont Morgan, a banker and powerful financial deal maker of that time, had observed the growth of Carnegie Steel Company and envisioned an integrated steel industry. For the same, with the help of Charles M. Schwab, he bought the Carnegie Steel Company and other big steel producers to merge into a single company. Following the negotiations, United States Steel Corporation was formed on March 2, 1901. The main aim behind the formation of US Steel Corporation was cutting costs, lowering prices, producing in greater quantities and raising wages to workers. Also, one single enterprise would mean no duplication and waste. Carnegie spent his last years doing extensive philanthropy works. Following his benevolent works, Carnegie established a number of libraries throughout the United States, the United Kingdom, and other English-speaking countries. In total, he had funded around 3000 libraries in different countries. His other considerable donations included giving $2 million in 1901 to start the Carnegie Institute of Technology (CIT) at Pittsburgh, $10 million in 1901 to establish the Carnegie Trust for the Universities of Scotland and $10 million in 1913 to endow the Carnegie United Kingdom Trust, a grant-making foundation.

 

Andrew Carnegie died on August 11, 1919 in Lenox, Massachusetts due to bronchial pneumonia. He was buried at the Sleepy Hollow Cemetery in North Tarrytown, New York. 

1835: Born in Dunfermline, Fife, Scotland.

1848: His family moved to Allegheny, Pennsylvania in the United States.

1850: Took the job of a telegraph messenger boy in the Pittsburgh Office of the Ohio Telegraph Company.

1853: Was employed by Thomas A. Scott of the Pennsylvania Railroad Company.

1855: With the help of Scott invested 500$ in the Adams Express.

1881: Took his family to a trip to United Kingdom.

1886: His younger brother Thomas died, purchased the iron ore fields around Lake Superior, Published his renowned book, “Triumphant Democracy”.

1888: Bought the rival Homestead Steel Works

1892: Combining all his assets and those of his associates, he formed Carnegie Steel Company.

1901: Sold his company to J.P. Morgan for the formation of United States Steel Corporation.

1919: Died in Lenox, Massachusetts due to bronchial pneumonia.